Department for Education
Today we are publishing an Education Funding Agency (EFA) investigation report into the financial management at Kings Science Academy in Bradford.
A Department for Education spokesman said:
We found serious failings in financial management at the Kings Science Academy (KSA). We informed the police who decided no further action was necessary. We required KSA to address these failings urgently. A plan is in place to recover funds and the school is undertaking its own investigation. Any necessary disciplinary action is a matter for the school.
Academies and free schools are subject to tougher financial accountability measures than maintained schools. Unlike maintained schools, academies must have their accounts externally audited. Unfortunately no system of financial accountability for any school can guarantee it will prevent all wrongdoing. However, we take swift action when concerns are raised - academies and free schools cannot hide from their financial responsibilities and are held to account for their actions.
KSA has a comprehensive action plan and agreed financial policy in place, which we are monitoring regularly. Actions have been taken to significantly restructure the governing body and recruit governors with the necessary skills. An experienced finance director has been appointed. The financial management systems and procedures have been overhauled to ensure proper accountability for public money.
Background
- we were notified of allegations about governance arrangements in late 2012 by a whistleblower
- we examined the allegations on an already scheduled visit to verify the schools own assessment of its financial management and governance
- the school had already engaged with chartered accountants to carry out their own review of systems. They also raised concerns
- the outcomes of our visit and the schools own findings led us to conduct a forensic investigation in early 2013. We shared an interim report with the school in March
- our investigation found:
- 182,933 of lead-in grant was paid during the start-up period before opening in September 2011
- 59,560 was not supported by any evidence of payments being made and 10,800 of this was supported by fabricated invoices for rent
- there was a total of 26,775 which had been over-claimed against payments which had been made legitimately
- therefore a total of 86,335 had not been used for its intended purpose. Some further evidence from the academy of legitimate payments (eg for the accounting system) resulted in the repayment being reduced to 76,933
- we informed the police in April 2013. The police decided to take no further action
- the department issued a warning notice to the school in May 2013. It required them to take action to address failings in their financial management
- the school has implemented an action plan to:
- to significantly restructure the governing body
- to recruit new governors with the skills they need to deliver change
- to appoint an experienced finance director
- to overhaul the financial management systems and procedures to ensure proper accountability for public funding
- to pay back the money they owe
- we are monitoring regularly the schools progress against their plan. We are confident the school is progressing and dealing effectively with its financial management
- the school is still conducting its own investigation, after which they may take disciplinary action
- as set out in the Academies financial handbook, we publish all financial investigation reports. Taking into account due process, we planned to publish this report as soon as the school concluded its own investigation
Financial accountability of academies and free schools more rigorous than maintained schools
- the accountability system for academies has a number of features which apply over and above those relating to local authority maintained schools. These features mean that in some important respects the regime for academies is more robust that it is for maintained schools
- academy trusts are constituted as companies limited by guarantee and so are subject to the full rigour of the Companies Act. This means that unlike maintained schools academies are required to file independently audited annual accounts
- because academy trusts are constituted as companies, their governors are also company directors. This means that academy governors are subject to the full range of statutory and fiduciary duties required of a company director
- academies are also constituted as charitable trusts. This means that the governors of academy trusts have the additional responsibility of also being charitable trustees and are therefore also subject to the full range of statutory and fiduciary duties which apply to trustees